Singapore keeps its dollar on the current appreciation path
Singapore’s monetary authority kept the appreciation rate, width and central level of its exchange-rate policy band unchanged following July’s modest tightening. Core inflation rose to 2.1 per cent in July and August. The authority projects both core and headline inflation at 1.5–2.5 per cent next year, with energy supply and domestic wage pressures among the risks.
Economics & Markets··Midday
Exchange-rate settings stay unchanged
Singapore retained its exchange-rate monetary policy settings on 14 October.[1], [2]
The Monetary Authority of Singapore (MAS), the country’s central bank and financial regulator, kept the appreciation rate, width and central level of its currency policy band. It manages the Singapore dollar against a trade-weighted basket of currencies. July’s review had increased the appreciation rate very slightly. Since that change, the currency has strengthened modestly in the upper half of the band.[1]
Core inflation rises to 2.1 per cent
Core inflation averaged 2.1 per cent in July and August, up from 1.5 per cent in the second quarter. Food inflation rose from 1.9 per cent to 2.2 per cent over the same comparison. Healthcare subsidies and telecommunications competition restrained some service prices. The authority projects core inflation of 1.5–2.0 per cent for the year, with headline inflation at about 2.0 per cent.[1]
Energy supply shapes next year’s outlook
For next year, MAS forecasts both inflation measures at 1.5–2.5 per cent. It expects recovering energy and food supply and education and healthcare subsidies to help price pressures ease around midyear. Persistent commodity increases and stronger technology demand tightening the labour market feature among its upside risks. Faster restoration of energy supply from the Middle East could instead reduce price pressures, according to the authority.[1]
